Top-Down Influence? Predicting CEO Personality and Risk Impact from Speech Transcripts
This addresses the lack of publicly available personality data for top managers, providing empirical evidence for management theories, though it is incremental in applying existing methods to a new domain.
The paper tackled the problem of empirically measuring CEO personality's impact on company performance by developing a text-based regressor using crowd-sourced MBTI assessments, achieving moderate to strong correlations for three out of four dimensions and showing that predicted personalities explain financial risk.
How much does a CEO's personality impact the performance of their company? Management theory posits a great influence, but it is difficult to show empirically -- there is a lack of publicly available self-reported personality data of top managers. Instead, we propose a text-based personality regressor using crowd-sourced Myers--Briggs Type Indicator (MBTI) assessments. The ratings have a high internal and external validity and can be predicted with moderate to strong correlations for three out of four dimensions. Providing evidence for the upper echelons theory, we demonstrate that the predicted CEO personalities have explanatory power of financial risk.